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SERVICE TAX
2018-TIOL-3563-CESTAT-MAD
Ramkumar Giri Vs CCE
ST - The assessee entered into an agreement for lease of property for hotel purposes & paid service tax for the same - The assessee later realized that hotels were not covered under the defition of Renting Of Immovable Property, since the building is used for the purpose of accomodation - Hence the assessee claimed refund of tax paid, but the same was rejected by the original adjudicating authority as well as the appellate authority.
Held: The primary ground for rejecting service tax is that the building comprises of a lodging house which has a restaurant & banquet hall & so the same does not classify as hotel - Persual of Lease Deed reveals that parts of the building were let out for payment of rent separately - Only that part of the building which is used for accomodation would fall within the exclusion part of the definition - It is not the case that the restaurant coffee shop, permit room or banquet hall are fully available for exclusive use of lodgers staying in the hotel - Neither are such facilities open for use by lodgers not staying in the hotel nor does the hotel rent out any portion to non-lodgers - Hence the refund has rightly been denied by the Revenue authorities: CESTAT (Para 2,5,8)
- Assessee's appeal dismissed: CHENNAI CESTAT
2018-TIOL-3561-CESTAT-BANG
Hassan Hajee and Company Vs CCE & ST
ST - During the period of dispute, duty demands were raised against the assessee under Cargo Handling Service, for activities carried out in its capacity as CHA & CFA - Such findings were based on a letter from the Financial Adviser & Chief Accounts Officer, NMPT stating to have not authorized any person in any manner to carry on business on the Port - However, the Tribunal later set aside the findings of the O-i-O and classified the appellant's activities as taxable under Port Services - Hence the Revenue filed the present application seeking rectification of mistake.
Held: There appears to be no error apparent on record in the Tribunal's order, barring a typographical error wherein the words 'for subsequent period' had to be written in place of 'earlier period' - However, correcting such an error will not influence the Tribunal's decision on merits - In the garb of an application for rectification, the Revenue cannot seek review of the entire case, as the same is impermissible in law: CESTAT (Para 1,2,5)
- Revenue's application dismissed: BANGALORE CESTAT
CENTRAL EXCISE
2018-TIOL-3565-CESTAT-KOL
Zillon Pack Vs CCE
CX - The assessee is engaged in manufacture of various kinds of printed cartoons - It has been the case of Revenue that assessee have realized the amount towards printing and processing charges prior to actual manufacturing of printed cartoons - It has further been elaborated that assessee before undertaking the manufacture of printed cartoons to his various customers first gets made the drawing, designing, photography in layout form with different illustration from the creative designers and after a particular design, layout of printed cartoons is approved by particular customer, the same are manufactured - The Revenue has made a case on the basis of above for inclusion of the design, drawing and layout charges in the assessable value of printed cartoons as per the provisions of Section 4 (3)(d) of CEA, 1944 read with Valuation Rules - A SCN demanding Central Excise duty was issued under Section 11A of CEA, 1944, wherein a penalty under Section 11AC has already been proposed for imposition on assessee - As it can be seen that the matter is no longer res-integra and the issue has already been decided by Tribunal, which have also been endorsed by Supreme Court - No lacuna found in impugned O-I-A and therefore, appeal of assessee does not have any merit and therefore, the same is dismissed: CESTAT
- Appeal dismissed: KOLKATA CESTAT
2018-TIOL-3564-CESTAT-MAD
Ultimate Alloys Pvt Ltd Vs Commissioner of GST & CE
CX - The assessee company manufactured Alloy Steel Castings - It purchased inputs such as steel scrap, stainless steel melting scrap & MS scraps and availed Cenvat credit on them - However, the Department opined that the assessee availed irregular credit on non-duty paid inputs received fraudulently in guise of secondary MS angles, MS ingots, End Cut, HR sheets & centre disc - Pursuant to investigations, the Department alleged there to be variations in the description of goods received & furnished in the dealers' invoices - Statements were taken from the suppliers/dealers & some employees of the assessee - Duty demands were raised with interest and penalties on the assessee and the dealers - Such levies were upheld by the Commr.(A).
Held: It is undisputed that the suppliers/dealers are registered - It is seen that they purchase scrap from manufacturers and from local sources - The Department alleged that the scrap supplied by them to the assessee had not been sourced from the manufacturers - Although the Department relied on statements taken from the dealers, one of the statements had been retracted later - Besides, none of the other deponents appeared for cross examination - The statements of the assessee's employee have nothing in common with the Department's allegations - Moreover, it is also not the case that the Department intercepted some raw materials, took samples & tested them to prove its allegation - Hence the Department did not sufficiently make its case and the allegations in the SCN are not supported with solid evidence but statements only - Hence the demands & penalties be set aside: CESTAT (Para 1,5.1,6)
- Assessees' appeals allowed: CHENNAI CESTAT
2018-TIOL-3562-CESTAT-DEL
T S Tech Sun India Pvt Ltd Vs CGST & CE
CX - The assessee company is a beneficiary of the Rajasthan Investment Promotion Scheme - It is required to deposit VAT, CST & SGST at the applicable rate, upon which it is entitled for subsidy - Such subsidy is sanctioned vide Form 37B - This challan can be used to pay VAT for subsequent periods - The Revenue opined that such mechanism was not equivalent to VAT actually paid u/s 4 of CEA 1944 & so it included such subsidy in the value of goods cleared by the assessee & raised demand for differential amount of duty, with interest & penalties.
Held: A part of the VAT paid by the assessee is remitted to it through challan 37B - Such challans are equivalent to cash but can only be used to pay VAT for subsequent period - The scheme recognizes such challans as legal payments of tax - Hence the Revenue is incorrect in taking a contrary view: CESTAT (Para 2,9)
- Assessee's appeal allowed: DELHI CESTAT
CUSTOMS
CIRCULAR
cuscir47-2018
Corrigendum to Circular 44/2018-Customs dated 13.11.2018 issued vide F.No. 450/148/2018-Cus IV
cuscir46-2018
E-cigarettes, e-Sheesha, e-Nicotine flavoured hookah are not approved as aids for Nicotine Replacement Therapy - only products adhering to Drugs and Cosmetics Act, 1940 are allowed for sale - non-compliant consignments not to be allowed clearance - CBIC issues directions
CASE LAWS
2018-TIOL-2472-HC-MUM-CUS
Shahid Yusuf Qureshi Vs CCE & C
Cus - M/s. Mayur Impex is a 100% EOU and it is engaged in manufacture and export of ready made garments for which purpose it imports fabrics which are cleared without payment of duty - This duty free import of fabrics is for use in its 100% EOU to manufacture and export its ready made garments - The assessee is an employee of M/s. Mayur Impex - SCN had been issued to M/s. Mayur Impex for having diverted duty free imported goods into the domestic traffic area - The assessee was also called upon to show-cause as to why penalty should not be imposed for having concerned himself with dealing with the goods which he knews or had reason to believe were liable for confiscation under Section 111 of the Act - The assessee himself in his statement made to the Customs has admitted that he was escorting the duty free imported fabrics into DTA - In view of the undisputed fact that penalty was imposed upon the assessee - The fact that penalty was deleted upon the other co-noticee would not by itself justify deletion of penalty on assessee - In case of other three assessees namely; Mr. Govind Khubchandani, Mr. Jairaj Kalyani and Mr. Pawan Lulla, no penalty was imposed as a finding of fact was recorded that they have either not dealt with the goods or in case of godown keeper that he had no knowledge that the goods are liable for confiscation - This concurrent finding of fact both by the adjudicating authority and the Tribunal that assessee was involved in transporting offending goods with knowledge that they are liable for confiscation under Section 111 of the Act is not shown to be perverse in any manner - Accordingly, the questions as proposed do not give rise to any substantial question of law, thus, not entertained: HC
- Appeal dismissed: BOMBAY HIGH COURT
2018-TIOL-2471-HC-MUM-CUS
Punjab State Container And Warehousing Corporation Ltd (CONWARE) Vs Dy.CCE
Cus - Assessee has challenged the judgment of Tribunal under which it was pleased to confirm the order passed by lower Authority - The Tribunal in impugned judgment focused mainly on the question of limitation and rejected the assessee's contention that extended period of limitation was not available to Department, since full facts were before the Department in return filed by assessee - The Tribunal relied upon the decision of Division Bench of Gujarat High Court in case of Neminath Fabrics Pvt. Ltd. 2011-TIOL-10-HC-AHM-CX - In the present case, Appellate Authority had come to the conclusion that the service tax rate was increased from 5% to 8% w.e.f. 14th May, 2003 and accordingly, assessee was liable to pay duty at such higher rate, which the assessee had failed to do - Court is in agreement with the view of Tribunal, more particularly in the context of the question of limitation - The question of non-payment of duty, is un-disputed-whether it was deliberate with a view to avoid the duty is question of fact duly addressed by Commissioner (A), confirming the order of Adjudicating Authority - The flavour of the order of Tribunal suggests that the entire effort of assessee was to persuade the Tribunal regarding question of limitation, having regard to the term 'relevant date' in the context of assessee's declaration in the return filed: HC
- Appeal dismissed: BOMBAY HIGH COURT
2018-TIOL-3560-CESTAT-ALL
Jogesh Kumar Bhimsarya Vs CCE
Cus - The assessee imported some quintals of Garlic from Nepal - The assessee paid duty at land Customs station upon assessment - The garlic was then transferred to Indian-registered vehicles - While in transit to Delhi, the Customs authorities inspected the vehicles and the covering documents - Apparently, the Garlic had been packed in plastic bags which had some Chinese inscription - Hence the Revenue opined that the Garlic had been sourced from China & seized the goods on grounds that third country origin goods were not allowed to be imported into India through Nepal - In his statements, the assessee admitted to have imported Garlic of Chinese origin through Nepal - However, the assessee later produced a certificate from Nepalese Customs stating that the Garlic was of Nepalese origin - He further claimed that the sacks used to pack the Garlic were used ones, belonging to any country & were freely available in the market - However, the adjudicating authority relied solely on the assessee's admission that the Garlic was of Chinese origin & banned for import from Nepal - Hence the Garlic was cofiscated & penalty was imposed - The Tribunal later upheld such findings but reduced the quantum of penalty - The assessee filed application for rectification of mistake claiming that Tribunal omitted to examine bill of entries & certificate of origin, but it was dismissed - Later, the High Court remanded the matter back to the Tribunal for deciding afresh after considering relevant evidence.
Held - Apart from Chinese markings on the packing material, there is no evidence to prove that the Garlic is of Chinese origin - The Revenue presumed the same without enquiring into the meaning of the markings - The assessee produced purchase bills declaring the Garlic to have come from Nepalese markets & also mentioned that he purchased re-usable bags for packing the Garlic - Hence the assessee produced sufficient evidence to prove that the Garlic is of Nepalese origin - Besides, the assessee filed bills of entry at the Indo-Nepalese border, which were duly assessed - Such assessment orders must be treated as quasi-judicial orders of appealable nature - Thus if the Revenue was aggrieved by such assessment, it could have filed an appeal against such orders - The Department could not have seized & confiscated goods which have been given a clean bill by Customs - Hence the orders merit being set aside: CESTAT (Para 1-10)
- Assessee's appeal allowed: ALLAHABAD CESTAT
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